Buyers' market as property listings spike

Rotorua property buyers are holding the power when it comes to the city's housing market.

Asking prices in Rotorua have edged higher but more properties have come on to the market in the past month.

McDowell Professionals Rotorua director Phil Hereford said it was a buyers' market in the city.

"We still haven't got a lift in our prices in Rotorua of any significance and the total number of sales for October will be less than what they were in September."

Nearly 1000 new Rotorua listings came on the market last month - a 24.8 per cent jump from September.

Mr Hereford said asking prices had remained relatively stable but the negotiation process was becoming more challenging.

"Purchasers are still holding themselves down price-wise and home owners are hearing all these positive things - mainly with regard to Auckland and the like and their expectations are starting to rise a little bit."

The NZ Property Report, compiled by Realestate.co.nz revealed average asking prices for New Zealand homes hit a record high in October, as a surge of new sellers entered the market.

The seasonally-adjusted average asking price of $445,529 was driven up by record highs in Auckland and Canterbury, Realestate.co.nz marketing manager Paul McKenzie said. It was the first time the average asking price topped $600,000 in Auckland and $400,000 in Canterbury, he said.

Mr McKenzie said seller confidence was reflected in the number of new listings, which was up significantly in October, at 12,688 - 14 per cent more than in September and 12 per cent up year-on-year. But Mr McKenzie said with debate around housing affordability, sellers could start to lower their price expectations if more homes flooded the market, favouring buyers.

Harcourts chief executive officer Hayden Duncan said there were pockets of the country where sellers' expectations were too high and buyers were waiting for new lower-priced stock to come on to the market. But that was not a nationwide trend.

"In a number of inner-city suburbs in Auckland, things are elevating to a point where owners have the right to be optimistic and are achieving what anyone might normally or reasonably think is a unrealistic price."

However, in other areas such as Wellington, demand wasn't as strong so vendors were dropping asking prices to meet demand.

"It's a very mixed market and to generalise across New Zealand is somewhat misleading.

"The only trend that we've seen in every market that we operate in throughout New Zealand is that auctions are becoming the preferred method for people transacting in real estate."

Figures from Ray White Group show October 2012 had been the strongest month since the global financial crisis - with a $500 million turnover, unseen since March 2007.

Ray White New Zealand chief executive Carey Smith said strong sales were driven by continued migration and relocation of those affected by the Canterbury earthquakes, record low interest rates and buyer confidence.